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376 whales hold 33 Percent Ether says Chainalysis

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According to recent data, one third that is almost 33 percent of the total ether in circulation is owned by 376 whales. This was according to the data up to 1st May. Chainalysis, a blockchain startup recently published a study on Wednesday revealing these statistics.

Though the 4376 people seem to be owning 33 percent of Ether in circulation in 2019, statistics show that the numbers have gone down as compared to the data of 2016 and 2017. The study also found that these 376 people don’t have a very significant impact on the ETH price.

The prices of ETH are immune to the ownership of these 376 people but the intraday volatility isn’t. When any of these make a large sell-off the intraday volatility in the cryptocurrency market increases.  Chainalysis defined whales as the top 500 holders of the cryptocurrency.

The study shows that the ether whales account for 7 percent of all the transaction activities. Further, the study revealed that almost 60 percent of the total whales are not active users.  They are holding their assets and are not trading regularly on any cryptocurrency exchange.

This means statistically the users that are not much active constantly hold almost 25 to 40 percent of the circulating supply of Ether. They account for only 5 to 18 percent of the transaction volumes as reported by chinalysis.

For further analysis, chinalysis deployed the Vector Autoregression (VAR) model.  This model is often used in financial time series analysis. Using this model Chinalysis found that ETH prices follow BTC prices to much extent. On average, the report said that if BTC prices see a rise of 1 percent than the next day ETH is sure to increase by 1.1 percent.

The study, however, was unsuccessful in finding any “statistically significant” impact of BTC prices on ETH’s intraday volatility. The model also studied the effect of whales when they trade using the exchanges. It revealed that the funds that are sent impact the volatility but not the price and in case of received funds neither the volatility, not the price is affected.

“These preliminary findings are consistent with the literature on stock market prices and volatility. Academics have found that large anomalous fluctuations in traded volumes of particular stocks, notably the S&P 500, tend to impact volatility and not price levels.” Chainalysis concluded.

 

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